rnathan,
Classy post, and welcome aboard.
<< the mention of lawsuits & blackmail irked me >>
TBH, lawsuit mentions, as regards 3G air interface IP irk me as well. It is not the proper tactic for QCOM at this time, IMHO, as they are integrating themselves nicely, albeit firmly, into the overall wireless community that is decidedly and traditionally committee based and open.
Please note that while IDCC may have more lawyers on staff than QCOM, QCOM has lots more money to hire same animal tehen needed.
BTW: I am perhaps the most contrarian poster on Qualcomm and CDMA that exists here (although my only current wireless play is Qualcomm because of its gorilla status) but nobody has thrown me off the board yet. <g> So questioning aspects of Qualcomm's gorilla status is most appropriate.
No matter how glamorous a company might seem you best be able to defend your point of view about it here. Its an astute and tough bunch and they slice it and dice it, but that's what the board is all about.
<< As far as I understand the Gorilla status is based on the CDMA IP >>
The way we look at it, (and although IP plays a significant role) its about the hypergrowth of a discontinuous proprietary and open architecture controlled by one company that has had a significant value chain form around it, that it controls.
No other wireless player is a potential candidate for primate status.
One could make a case for ERICY being King of wireless infra or NOK, King of hansets, but boiling it down to the big arena of wireless they are just noble Princes wandering around muttering "To be, or not to be, whether it is nobler in the mind ... ". Hamlet Ollila, or somebody said that. In fact the press noted Jorma was wandering around Israel muttering that a week or so ago.
Mike Buckley correctly places the beginning of the tornado as end of 1st quarter 1998. This is when hypergrowth began. He uses subscriber growth as a metric. A better metric is handset sales, but stats are a little harder to come by. Qualcomm's IP is in the cdma air interface and although they collect some royalties and license fees on infrastructure, its handsets that produce revenue.
<< the whole issue may boil down to whether QCOM will receive significant royalties in WCDMA, if & when it becomes the de facto 3G standard >>
QCOM will receive significant royalties in WCDMA because their IP is essential to any form of CDMA. There is NO work around on this. Recognizing this, the ITU in late 1998 took ERICY (who has done considerable cdma development for many years) and QCOM (who commercialized CDMA) aside, and said look you MeatHeads, settle this NOW, or NO cdma air interfaces will be approved for Third Gen Mobile Wireless Telephony and everybody can go back to the drawing board and work on GPRS, EDGE, or whatever POS they want.
WCDMA (an obsolete and VERY confusing term) is now (since it has been standardized), most properly referred to as UMTS UTRA Direct Spread CDMA. It is an asynchronous version of CDMA. It will be the dominant mode of operation for 3G air interfaces. Whether this makes it THE de facto 3G standard, I am not sure.
Since 3G mobile wireless telephony is several years away from launching commercially, it does not yet bear on the current gorilla status of Qualcomm. When 3G enters hypergrowth, Qualcomm will (at the very least) be on Main Street, CDMA wise. Look at the CAP & GAP that the gorilla advantage affords, in regards to your current (or a planned) Qualcomm investment.
<< Last year's spectacular run (& the Gorilla moniker) was based implicitly on total ownership of all forms of CDMA >>
Last year's spectacular run was based on good sound reason when it started but the MoMo guys and no nothings got on board after the 4:1 split announcement.
If you have not read the classic "cool posts" on this please read Tekboys classic and a great one from another Eric (wish I could write like him), heck wish I could write like Tekboy but nobody will ever mistake me for "cool" except my wife and daughters and they don't always think I'm "cool":
Here is Tek:
Message 13475946
Here is Eric J. (not Eric L.)
Message 13983582
<< It might come down to a patent infringement lawsuit and the settlement thereof (hence the IDCC analogy). the waters are very muddy & a lot of spin doctoring is going on >>
Before 3G IP matters are fully settled there will be lawsuits filed. Most will settle. Some will run full course. All this is my opinion. I'm a highly opinionated guy.
<< To me a Gorilla is something like pornography - know it when you see it - not something with a lot of riders on it >>
I (we) think differently.
Silverbacks are easy to spot in retrospect: CSCO, INTC, MSFT, ORCL. Silverbacks die (IBM, SAP maybe). Moore's theory is based on examining them and using their characteristics as examples of future gorillas.
Finding the new ones and revalidating their gorillahood SEBL, ITWO, QCOM, a bit trickier. Finding new prospects even trickier (RMBS, SNDSK, GMST, ARMHY, CREE maybe). You turn up "shiny pebbles" very often.
<< Given all this uncertainty I feel it's appropriate to question the Gorilla status from an academic/objective standpoint and maintain the standards of this board >>
Agreed. Reexamining gorilla status for QCOM, SEBL, ITWO, is as important as looking for new gorillas.
<< lots of bona fide Gorillas at different levels of maturity >>
No. VERY few. Moore repeats this again and again. We know it.
Candidates, yes. gorillas, No.
Now maybe Moore is all wet. After all, Gorilla Game was his first and only book on investing per se. It is untested LTB&H investing theory. I think it is sound. Others here do. We put it to the test.
Once again, welcome aboard. Please do not just lurk.
- Eric - |
